Last checked at 3 Aug 2009 07:00
3 August 2009
CAPITAL & REGIONAL PLC
X-LEISURE FUND EQUITY ISSUE
Capital & Regional Plc, the X-Leisure Fund and Hermes Real Estate today announce that the Open Offer announced on 26 May 2009, has been successfully completed.
The X-Leisure Fund has raised £50 million in new equity which has been subscribed by 15 existing unit holders and one new investor. Capital & Regional has subscribed £4 million in cash as a result of which its interest in the fund is now approximately 12%.
The Fund's banking arrangements have been amended. The Fund has agreed with its syndicate of five banks to extend the life of the core banking facility to 31 March 2014 and to increase the loan to value covenant to 90% for the period to 31 December 2010, after which it falls in tiers to 65% from 1 July 2013. The interest cover ratio has been set at 130% until 31 March 2012 rising, in tiers to 150% from 1 April 2013.
The syndicate of banks has also agreed, in principle, to finance the Brighton Marina asset (which has been financed through an asset securitisation (CMBS) which is due to mature in October 2009).
The Fund has separately renegotiated its banking arrangements for each of the Castleford and Milton Keynes Xscape facilities the impact of which (through increased LTV covenants) is to increase its financial flexibility.
The property and (non-FSA regulated) fund management activities will be carried out by a new company, X-Leisure Limited. Structured as a joint venture between Hermes and Capital & Regional, X-Leisure Limited will operate as a partnership with one of the most experienced management teams in the leisure sector, led by PY Gerbeau. It is expected that X-Leisure Limited will be fully operational by the end of August.
The objective of the new arrangements is to increase the efficiency of the services provided to the Fund, to directly incentivise management to deliver Fund outperformance and to provide an opportunity for PY Gerbeau and his management team to build on their leisure capabilities. PY Gerbeau will step down as a director of Capital & Regional Plc with effect from 31 July 2009 to concentrate on his new role at X-Leisure Limited.
Alasdair Evans, COO of Hermes Real Estate and Chairman of X-Leisure Limited said:
"The success of the £50m open offer, raised from a very broad base of institutional investors, together with the extended arrangements with our syndicate banks, demonstrates huge confidence by the financial community for X-Leisure's new management arrangements and portfolio of locally dominant leisure parks."
Hugh Scott-Barrett, Chief Executive - Capital & Regional Plc said:
"I am delighted that the X-Leisure Fund has been able to strengthen its financial position. I am very excited about both the prospects of partnering with Hermes as well as the new management arrangements which will enable Capital & Regional to continue to profit from the expertise of the X-Leisure management team led by PY Gerbeau. The investment in the Open Offer, as well as fees from X-Leisure Limited, will put us in a much better position to benefit from the recovery in the leisure sector."
NOTE TO EDITORS
The X-Leisure Fund is the largest specialist fund investing in UK leisure property, owning 18 properties throughout the UK (after the sale of the 02 Centre), and as at 30 December 2008 had a total floor space of 3.7 million sq ft.
As at 31 December 2008 X-Leisure had gross assets of £760m, and its profit before revaluation movements for the 12 months to 31 December 2008 was £8m (unaudited). Gross assets (including the impact of the sale of the O2 Centre in April 2009) were £561m as at 30 June 2009 (unaudited).
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For further information:
Capital & Regional
Hugh Scott-Barrett, Chief Executive Tel: 020 7932 8121
Maitland
Martin Leeburn / Emma Burdett Tel: 020 7379 5151
[For Hermes Real Estate]
Redwood
Debbie Cracknell/Claire Duffy Tel: 020 7828 5553
[For X-Leisure Limited]
ReputationInc Tel: 020 3178 4760
Tom Wyatt